Research On The Impact Of Executive Power And Internal Control On Non-Efficiency Investment

Under the new situation of slowing domestic economic growth,efficient investment will be conducive to the full and rational use of resources,thus escorting steady economic growth.Listed companies are representative enterprises in China’s economic development,but their general investment efficiency is not high,and they are faced with excessive investment,insufficient investment and other unreasonable resource allocation,resulting in non-compliance with capital market and economic development needs.The reason is that the separation of the ownership and control creates a conflict of interest between shareholders and executives.The executives will use power to distort corporate investment decisions to maximize their own interests,leading to inefficient investment.Internal control,as a governance mechanism to make up for incomplete contracts and avoid conflicts among corporate stakeholders,can effectively allocate resources and help enterprises improve their efficiency.Then,how does executive power combined with internal control affect non-efficiency investments?It is a question worthy of further study.Based on this background,the paper uses normative research combined with empirical research methods.In the normative research part,the paper first explains the meaning of executive power,internal control and non-efficiency investment.Using information asymmetry,principal-agent,and enterprise property rights as the basis,this paper puts forward a hypothesis about the influence of internal control combined with executive power on non-efficiency investments.,and deep into the different property rights level(divided into family business,non-family business),explore the mechanism of internal control combined with executive power on non-efficiency investment.In the empirical research part,the paper selects the financial data of Shanghai-Shenzhen A-share listed company in 2009-2017 as a sample.The Richardson investment efficiency model is used to quantify the degree of non-efficiency investment of the enterprise,and then a multiple regression model is established,in which the explanatory variables are executive power,internal control,the explained variable is non-efficiency investment and its two manifestations,and according to whether it is a family.The enterprise conducts group regression,and the research results show that:(1)Internal control can inhibit the positive effect of executive power on non-efficiency investment;(2)Compared with family business,non-family companies improve the quality of internal control can significantly inhibit the positive effect of executive power on non-efificiency investment.On the one hand,the research of this paper improves the interpretation of the impact factors of non-efficiency investment,enriches the theory of enterprise investment,On the other hand,this paper is of significance for thinking about the development direction of China’s enterprise property rights reform,improving corporate governance structure,strengthening enterprise supervision and management,and then achieving reasonable and efficient management mode for enterprises and optimizing market resource allocation.